Succession planning― overview

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

The planning for passing on a family company or business to future generations should be done well in advance of the current owners taking retirement or dying. There will be issues around who the business should be passed on to, for example, the owners’ children , employees of the company or a sale to a third party. It will also have to be decided whether the owners want to continue receiving income from the business and whether they wish to still have some involvement through maintaining share ownership.

There are also tax considerations to bear in mind especially involving CGT and IHT. This guidance note summarises some of the succession options and links to further technical commentary.

The succession options reviewed here are as follows:

•
transferring the assets on death to the children of the owners
•
transferring business assets by way of a gift during the lifetime of the owners
•
purchase of own shares by the company
•
buy-out by family members or management
•
passing the business over into an employee ownership trust (EOT)
•
keeping

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